Recovery of Palau tourism remains uncertain despite easing of COVID restriction, a high vaccination rate, according to the 2022 Palau economic brief by the Graduate School of USA.

The report said tourism rebounding remains ‘elusive,’ with only a handful of visitors arriving in Palau, including the military.

The lack of airline routes to Palau is also making tourism recovery slower.

“In addition, lack of readily available airline routes or schedules to Palau, and the high cost of fuel and travel resulting from both the

global economic recovery and Ukraine war, indicate an elusive outlook for tourism recovery,” the report said.

President Whipps attributes the slow opening of Palau’s key markets in Asia to the slow tourism recovery.

On the plus side, the report cited an ongoing study by the Asian Development Bank (ADB) on the tourism sector that indicated

that Palau has a very attractive product to offer, but whether it can translate to sustained recovery is uncertain, it added.

The report also noted that Palau appears to lack an “articulated long-term vision” on its tourism policy.

 “Palau has adopted a policy to attract high-value tourists but has limited resources/tools to implement the policy. As a result, tourist developments have been virtually unconstrained, and in an unregulated market.”

It said that Palau needs a tourism strategy to address issues, such as focusing on what kind of tourism it wants to attract.

“While the current focus is simply to reignite the industry, the critical long-term issues of the size, location, and type of industry, Palau wants to attract remain unclear. The need for a tourism strategy or

the master plan thus remains unfulfilled. Until a comprehensive approach can be developed, Palau remains subject to the vagaries of market forces and development of an industry that is not of its choosing.”

This latest report projected that tourism may not recover until 2025, a more pessimistic view than the one it had in 2021.

It said that Fiscal Year 2020 was set to be a good year for Palau tourism with 120,000 visitors anticipated, but COVID-19 hits and tourism arrivals dropped to zero.

While Palau opened a travel bubble with Taiwan it was unsuccessful.

With high inflation rates and slow tourism recovery, Palau looks at a more challenging year ahead.

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